DEFENCE AEROSPACE INDUSTRIAL STRATEGY
– 16 November 2017

Dr Julian Lewis: In the run-up to this debate, which was so ably introduced by the hon. Member for Stoke-on-Trent North (Ruth Smeeth) – a star of the Defence Committee – I and no doubt other members of the Committee were almost inundated with communications from defence companies that wanted to showcase how much they do for industry in this country. For example, Boeing UK wanted to draw attention to its 18,700 workers in the UK. MBDA, the missile specialists, wanted to draw attention to the £1 billion of annual sales that it generates. BAE Systems, however, is in a rather special position. It has over 83,000 employees in 40 countries. It describes itself as a global leader in making and supporting combat aircraft and states:

“If we are to sustain this leading position, a government commitment to the development of a next generation of combat aircraft” –

precisely as the hon. Lady just said –

“would be of immense value to the industry.”

The Government are committed to an industrial strategy process, with a defence sector deal as a component of that. The question is whether that is sufficient or if we need a separate strategy. It seems rather strange that when we have a separate national shipbuilding strategy – shipbuilding, for all its valuable potential for export, does not even begin to approach the potential and actual magnitude of aerospace industry exports – we should want to subsume a strategy for the aerospace industry under a general industrial strategy.

In the case of the joint strike fighter – the Lightning II, which has been referred to – we provide parts for all the aircraft that are built, but only sections of the aircraft. As valuable as that may be, it is not enough to sustain our importance as a prime integrator with all the supplying companies that depend on that process.

The industry is asking the Government to think ahead and to make advance investment so that we will be able to be in the van of future development in aircraft, but I believe that requests for investment have to be a two-way process. For example, it is not just BAE Systems asking for this; Rolls-Royce itself says that the current research and development investment in future combat engine capability ceases at the end of 2017. I would therefore just say this: if these companies want the Government and the country to invest in the future of the industry, we are entitled to say to them, “You need to invest in the future of the workforce.” As I ​pointed out in proceedings on the urgent question about the BAE Systems redundancies on 10 October, BAE Systems is a giant company enjoying a

“near monopoly position in many parts of the British defence procurement structure.” – [Official Report, 10 October 2017; Vol. 629, c. 169.]

It should therefore be working, in the closest possible co-operation, with the Government to see whether job losses can be mitigated. It is a two-way process; we need the companies to invest in the workforce.